The first is that Apple has at least three patents on uni-body construction. These are not vague software patents, but tangible design and manufacturing patents. It will be very difficult for competitors to side-step these. I fully expect for someone try, and I also fully expect Apple to let slip the dogs of patent war. Kudos to Apple for innovating here...they cracked the DNA of the ulta-book years ago, and will reap the benefit for at least 12 more.

But the article said it would be a $100 savings at retail, not a $100 markup. How can something that only saves $10 (wholesale?) result in a $100 savings (retail)? Are manufacturers really willing to lower the retail price of their box by $90? They wouldn't just take that extra $90 in profit? Business really baffles me.

Okay... let's try this again.

The part might be a difference of only $10 but then we have to turn around and look at Apple.

If you start adding all of the costs down the line for Apple then that $10 extra on the MBA becomes, according to the "pc manufacturer", an extra $100 at retail... so, theoretically, since the MBA costs $1000, then that pc would cost $900 at retail.

I'm saying that the "manufacturer" is pulling figures out of his ass and that $10 difference only translates into a $45 difference, and therefore, $955.

Intel wants manufacturers to stay Intel customers. By providing them a prepackaged kit, they may persuade manufacturers from looking at alternatives (ARM-based systems for instance). It would certainly be easier to adapt an Intel-provided package than develop your own.

I think ARM is a threat for the thinner and lighter notebooks, especially when you consider Linux-based OSes, OS X (the umbrella of Mac OS and iOS) and Windows 8 will all run on ARM. I also think the threat isn't imminent from the desktop OS PoV this is the time when Intel needs to plan to keep that from happenings. Trying to sell more LV and ULV chips that can be used in ultra-light and ultra0thin notebooks is can benefit them in several ways.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Do you feel better now? Flexed your knowledge now you can continue your smarter than you complex. People like you humor me, comment has no real opinion on the article, just a need to be extra particular. Reminds me of Mike Tirico (not that you know who he is as I'm sure sports are beneath your IQ), if someone says the ball went 301yards he'll correct them and say actually it went 302 - who the hell cares it's in the general area. Lastly, speaking of tools, you are one.

/ghost

A lathe and a mill are two very different machines, that serve very different functions. The original commenter was not being arrogant or prickish by pointing that out. However, your response to the comment certainly was. Chill dude.

Quote:

Originally Posted by Kit_C

This is my first post. I registered just to say that this was way out of line. The article had a fundamental error, there is no foul in pointing it out.

The part might be a difference of only $10 but then we have to turn around and look at Apple.

If you start adding all of the costs down the line for Apple then that $10 extra on the MBA becomes, according to the "pc manufacturer", an extra $100 at retail... so, theoretically, since the MBA costs $1000, and because that one piece was $10 cheaper for the PC, then, once you go down the line, that pc would cost $900 at retail.

I'm saying that the "manufacturer" is pulling figures out of his ass and that $10 difference only translates into a $45 difference, and therefore, $955.

Could you elaborate on how that $10 "becomes" even $45 in savings? Would glue be cheaper to affix internal parts than screws, for instance?

it isnt a coincidence that Apple has all that production - those milling machines probably were bought specifically to service the Apple demand. I doubt that CNC chassis milling was a very big business before Apple decided to make the Macbook Pro that way.

This is more a measure of Intel's confidence than Apple's dominance - I'm sure that Foxconn would be willing to buy more CNC machines if Intel signed a 10 year supply contract with penalty clauses for termination.

Those machines in fact where build to Apple specifications, at least Foxcom ones. And also a unibody case if I remember well is a patented invention or process owned by Apple. The use of Liquid Metal is a unlimited one and is used for small parts inside most macs and mobile devices.

All these companies complaining about supplies and stuff are just paying the price of have incompetent CEO and poor planing. All Apple products are conceived in a way that they can earn the most out of them from the get go (manufacturing)

But the article said it would be a $100 savings at retail, not a $100 markup. How can something that only saves $10 (wholesale?) result in a $100 savings (retail)? Are manufacturers really willing to lower the retail price of their box by $90? They wouldn't just take that extra $90 in profit? Business really baffles me.

It would save the computer maker $20 not $10. $10 is the price Mitak pays before their process, as I read it. It doesn't say what the final cost is, just savings. Whatever the final cost to the computer maker they(hp or dell etc)may double it when they sell to retail suppliers. Retail may double that price. So if a part is $20 cheaper to Dell it's $40 cheaper to retail and $80 cheaper to consumer. Assuming keystone pricing all along the way which does seem out of line.

Anyway, it is interesting to see what the other PC makers are going to do. Especially because, as was commented upthread, they need to differentiate these from the classically under-powered, under-memoried, poor resolution screened netbooks that failed under the influence of the iPad. Intel has offered several reference designs over the years, including the low-powered netbooks. The PC makers have used them with varying success. And of course Intel doesn't help differentiate the processors because you have a huge range of performance characteristics in the chipsets (depending if they are true iCore or Celeron iCore technologies). So the average consumer sees "Intel Inside" and Core i3 or Core i5 and assumes that they are getting a steal on the latest chip tech, which actually only performances at 66% as the true i3 or i5. If the PC makers try the same thing in the Ultrabook benchmark - they will be seen as only fancy netbooks by most consumers.

If you are going to insist on being an ass, at least demonstrate the intelligence to be a smart one

Even if the numbers are exaggerated, I still don't get it. $10 is $10. How does it become $100. Remember this is a savings, right? So the case costs $10 less to make in fiberglass than of metal. How does this become a $100 savings at retail? It's still just a savings of $10.

It's a ratio of raw material cost to retail selling price markups. Typically consumer electronics will be a 4 to 1 ratio markup.

Intel wants manufacturers to stay Intel customers. By providing them a prepackaged kit, they may persuade manufacturers from looking at alternatives (ARM-based systems for instance). It would certainly be easier to adapt an Intel-provided package than develop your own.

Pretty sure they are gonna have a major issue with heat dissipation. One of the great things about aluminum is its ability to transfer heat out of the system. Fiberglass acts almost as an insulator and these things are gonna have to have crazy vents in them or they are gonna bake!

Do you feel better now? Flexed your knowledge now you can continue your smarter than you complex. People like you humor me, comment has no real opinion on the article, just a need to be extra particular. Reminds me of Mike Tirico (not that you know who he is as I'm sure sports are beneath your IQ), if someone says the ball went 301yards he'll correct them and say actually it went 302 - who the hell cares it's in the general area. Lastly, speaking of tools, you are one.

No, it's not like that at all.

How about this: It's like reporting on a golf game and saying the golfer is swinging a bat. How a lathe and a mill make a part, and what kind of parts they can make, are very different, even if the technology behind both are similar.

If you're saying it's information that you don't care about, that's fine, but correcting wrong terminology is very different than getting your yardage within a third of a percent accuracy.

The problem is in that case there are design constraint. PC's beats Apple prices by using cheap and bulky "designless" containers with no power, size or weight limits.

This is why they cant beat apple in the tablet or air segment.

... and I'm extremely happy about that. Odd, though, that we don't have some pc blowhards entering this thread explaining how much better the $1300 pc is compared to the "crappy" $999 MBA. I guess those days are gone... <tear in eye>

Pretty sure they are gonna have a major issue with heat dissipation. One of the great things about aluminum is its ability to transfer heat out of the system. Fiberglass acts almost as an insulator and these things are gonna have to have crazy vents in them or they are gonna bake!

That's an interesting point, but I wonder how much the aluminum helps when none of the heat sources are thermally coupled with the shell like a chip and its heat sink. Keep in mind that most computers have a plastic shell.

As for the unibody supply...i thought Apple had a patent on this process. If so, wouldn't that already lock out competitors from trying to source the process for their offerings?

They have a design patents on their particular case designs, but that would only cover the aesthetics - so it wouldn't stop somebody making a different looking unibody case. As for utility patents, a quick search turns up none assigned to Apple with 'unibody' or 'monocoque' in the abstract. It's quite possible that they have no patents on the manufacturing methods used and it's quite certain they have none on unibody construction in general since it had been around in automobiles and airframes for years.

Long known as a master of the supply chain for overseas components, Apple has reportedly out-muscled the competition for yet another crucial element of its products: unibody metal notebook chassis.

Intel and its partner PC makers have been "aggressively searching" for new materials to build chassis for the chipmaker's thin-and-light "Ultrabook" design. According to DigiTimes, companies have been forced to seek alternatives because Apple already controls most of the "significantly limited" capacity.

So wait, this is Apple's fault that chassis vendors are operating at capacity and are unable to retool and increase production for other PC makes/models? Or maybe it's the consumer's fault for buying so many Apple products, forcing chassis manufacturers to meet consumer demand?

Personally, it seems that based on the OS most PC ultrabooks would be using, there's already a surplus of suitable alternatives: commode shaped white procelain.

That's an interesting point, but I wonder how much the aluminum helps when none of the heat sources are thermally coupled with the shell like a chip and its heat sink. Keep in mind that most computers have a plastic shell.

Are you sure that they're not coupled in the MBP and MBA? That's actually one area where they do have a patent.

So wait, this is Apple's fault that chassis vendors are operating at capacity and are unable to retool and increase production for other PC makes/models? Or maybe it's the consumer's fault for buying so many Apple products, forcing chassis manufactures to meet consumer demand?

Personally, it seems that based on the OS most PC ultrabooks would be using, there's already a surplus of alternatives: commode shaped white procelain.

I'm waiting for Google to respond, saying that this is yet another example of Apple et al ganging up on them.

No, you have a contribution from Mr. I Don't Care about minute details that I feel are minutia. No one has to agree, I truly don't care. It's my opinion. I enjoy this website, but the ellitisism and extreme nerdism humors me at times.

"A segment of fiberglass is said to be between $5 and $10 cheaper than a magnesium-aluminum one, and an entire notebook could see $20 in savings on the production end with the use of fiberglass. That could equate to savings of $50 to $100 at retail, according to Taiwan fiberglass maker Mitak Precision."

I'm most definitely not a business man. So how does this work? How does $5 to $10 turn into $50 to $100?

Quote:

Originally Posted by Eriamjh

It happened in 2010 with the MacBook Airs. I freakin' love hearing PC vendors complain they can't complete with Apple on price!

Markup, baby. Markup. Although I think the 10x margin is exaggerated.

Quote:

Originally Posted by JeffDM

It might not be exaggerated, they have to ammortize the cost of designing the part, making the molds and other custom tooling, startup costs, shipping etc. The incremental cost of the part doesn't reflect the entire cost of getting the part made.

Quote:

Originally Posted by island hermit

With today's tight margins I doubt if it would add more than $45.

I think the author was just pulling figures out of his ass... a little hyperbole adds some drama...

Quote:

Originally Posted by Curmudgeon

Even if the numbers are exaggerated, I still don't get it. $10 is $10. How does it become $100. Remember this is a savings, right? So the case costs $10 less to make in fiberglass than of metal. How does this become a $100 savings at retail? It's still just a savings of $10.

It is disingenuous to isolate the cost of a part then try to extrapolate the contribution to the retail price of the finished product. The COGS (Cost of Goods Sold) includes much more than parts: cost of money; manufacturing; distribution; warehousing; returns... to mention a few of the major ones.

It's been a while, but back in the late 1980s Apple provided its best retailers with a gross profit margin of about 20% -- For an Apple product the reseller sold for $100 he paid Apple $80 with net 30 day terms.

If you were agile, and consistent in your forecasts you could turn your inventory fast enough that you could make close to the 20%, less shipping, space for inventory, inventory handling costs (shipping, receiving, burn in, testing). Computers in those days were not very reliable out of the box.

Usually, though a reseller ended up sitting on a lot of inventory with bills to the manufacturer coming due. You could negotiate returns or delay forecasted/contracted shipments -- but there was shipping costs, a restocking fee and higher unit cost (lower margin) for not meeting your targets.

As you couldn't discount Apple products, many resellers would sell an Apple product at full price, packaged with software and accessories at severely discounted prices. Others would take loans from 3rd-parties to finance their inventory say at 3-5%.

So the reseller's Gross margin of 20% rapidly deteriorated -- the final costs being the 2-5% credit card fee when you sold the product. Any customer returns to the reseller were very costly over-and-above the normally cost structure.

In the days when there was a computer reseller on every corner, a good reseller was lucky to get 7-10% net margin on off-the-shelf products.

I suspect that's about what the Best Buys and Targets realize, today.

By comparison, a Safeway (or other) supermarket is doing a fantastic job if it can reach 1%, yes one percent net margin.

The above observations, admittedly, are dated -- and I've only discussed the direct product costs.

In today's world (using rounded numbers) Apple sells an iPad for $500 and pays roughly half that for parts. The completely manufactured and packaged iPad, likely costs Apple about $300.

Apple probably sells that iPad to resellers for $400 realizing about 30% plus gross margin on sales of its lowest margin iPad through 3rd-party resellers.

The more expensive iPads have higher margins and Apple direct sales through their stores increases the overall Apple gross margin for the iPad line to say, 40%.

So you do the calculations on what adding or removing a $10 part would do to the retail price -- all things considered.

BTW, some minutes ago AAPL market cap was within $14 Billion of XOM.

"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -

Do you feel better now? Flexed your knowledge now you can continue your smarter than you complex. People like you humor me, comment has no real opinion on the article, just a need to be extra particular. Reminds me of Mike Tirico (not that you know who he is as I'm sure sports are beneath your IQ), if someone says the ball went 301yards he'll correct them and say actually it went 302 - who the hell cares it's in the general area. Lastly, speaking of tools, you are one.

/ghost

Actually the guy is right it is a mill. That said, we're not talking about great tolerances here. A Hurco or HAAS CNC machine could do the job and only about cost 50k to 70k -- and the market is flooded with them. Really, how hard could it be to find vendors?

Domestic Manufacturing had picked up recently with a lot the demand being just in time. Meaning that parts suppliers didn't have time to want for a container to ship from China. Add to that the recent issues with supplies from Japan and the market had picked up a bit. There are plenty vendors that could mill laptop case parts.

At the mid to high end, this is nothing too new, just even more pronounced now. The myth has been that Apple is more expensive. The reality is that Apple just didn't cater to the cheap as shit market segment. At the higher end of the spectrum, Apple was always competitive or even better value than their competitors. Now with their supply chain muscle, they are able to dictate lower prices and better supply guarantees. It's really been this way since they started gobbling up the world supply of flash memory.

As for the unibody supply...i thought Apple had a patent on this process. If so, wouldn't that already lock out competitors from trying to source the process for their offerings?

Also look at the differences between GOOG and MSFT. Almost double the valuation of GOOG and over 50% greater than MSFT. New world order! I wouldn't be surprised if Coke and Pepsi start whining that Apple is buying up too much aluminum forcing them to spend more of cans for their sugar water.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

If Intel wants to create an Ultrabook with similar dimensions and specifications to Apple notebooks and can't do it with a similar price, it has a choice. It can choose to create notebooks with Linux. It isn't free for manufacturers but it is way cheaper than Windows. Doing this would make the Ultrabooks price competitive with the Apple notebooks.

Imagine Intel being the impetus for Linux to take off. The number of developers that would flock to it would be amazing. Someone could create a program that would allow Linux to utilize the Thunderbolt port.

Many of the features in Leopard were already in Linux. The only thing Intel would need to do is ensure that there were drivers for all of the peripheral devices and all of the codecs for video were installed. Then their new Ultrabook computer standard would be competitive with the Apple laptops.

If the Linux community would throw some money at the Libre Office software and make it work as well as the Microsoft Office suite and also make it capable of reading and writing in the MS Office formats, Linux would expand greatly into the world. Intel would then have a big piece of the high end notebook market. It would protect itself from the loss of Apple's business should Apple switch to ARM processors or something else from it's own chip division.

Why don't HP and Dell realize they would have fewer customer service problems if they dropped Microsoft? The only real problems I've had with Linux were the lack of drivers present in the initial installation. I had to search for them and get help from forums with a few things. Major manufacturers could fix these shortcomings and bugs before shipping their hardware.

The downside of selling millions of Linux Ultrabooks is there would be more viruses created for Linux and the Linux community might need to start running anti-virus software.

Do you feel better now? Flexed your knowledge now you can continue your smarter than you complex. People like you humor me, comment has no real opinion on the article, just a need to be extra particular. Reminds me of Mike Tirico (not that you know who he is as I'm sure sports are beneath your IQ), if someone says the ball went 301yards he'll correct them and say actually it went 302 - who the hell cares it's in the general area. Lastly, speaking of tools, you are one.

/ghost

Actually, I care, because I like to learn stuff. I read this site mostly for the "What's new?" factor as it applies to Apple. But I find myself engaged in these threads because people who know more than I do about a wide range of things share their knowledge.

As usual, you have shown are a great researcher. Excellent find. I would have thought this concept had come from NeXT but it's clearly from Apple 5 years before Apple bought NeXT.

Abstract: A metal frame is fabricated from magnesium alloy and all the main components of the computer, including the logic board, the hard disk drive, the keyboard, the upper and lower halves of the computer's case, and the pivoting display screen are all directly attached to the frame. The frame thus offers a method for constructing a personal computer which will have greatly improved shock resistance, integrated electromagnetic isolation, and structural strength, without increasing the weight of the completed computer in any significant fashion. Additionally, by means of a cooling flange fabricated as part of the frame, the central processing unit of the portable computer is thermally connected to the frame, which then acts as a heat-sink for the central processing unit, greatly improving its reliability.
Note the patent was filled in 1992 and refers to floppy disc drives in the full description. We've come a long way.

PS: I wonder if the inventors are still at Apple.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Pretty sure they are gonna have a major issue with heat dissipation. One of the great things about aluminum is its ability to transfer heat out of the system. Fiberglass acts almost as an insulator and these things are gonna have to have crazy vents in them or they are gonna bake!

That was my comment in the first post of this thread but I'm still waiting for the physicists to weigh in

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"